A share of preferred stock pays a dividend of 0.50 each quarter. If you are willing to pay 20.00 for this preferred stock, what is your nominal (not effective) annual rate of return?
A) 10
B) 8
C) 6
D) 12
E) 14
Question 2
If Genco's preferred stock pays a dividend of 5 per share and its investors require an 8 return, what should its price per share of preferred stock be?
A) 50.00
B) .40
C) 62.50
D) 6.25
E) 12.75